Offeror Provides Only First Pages of Teaming Agreements, Gets “Marginal” Score

An offeror provided a procuring agency with only the first pages of its teaming agreements with proposed subcontractors–and received a “Marginal” score on the small business participation factor as a result.

In a recent decision, the Court of Federal Claims held that the agency reasonably downgraded the offeror for failing to provide its entire teaming agreements, saying that the agency correctly determined that it was unable to determine what work would be performed by the subcontractors.

The Court’s decision in ATSC Aviation, LLC v. United States, No. 18-1595C (2019) involved an Army solicitation for a multi-billion dollar multiple-award IDIQ. Under the resulting IDIQ contracts, the successful offerors would provide the Army with worldwide logistical support services for non-standard rotary-wing aircraft.

The solicitation called for the evaluation of six criteria, including Small Business Participation. Under the Small Business Participation factor, all offerors were to submit a Small Business Participation Plan based on executing a Sample Task Order. Offerors were to identify each small business they would use as subcontractors. Among other requirements, offerors were directed to provide copies of teaming agreements that defined subcontractor work.

ATSC Aviation, LLC was one of ten offerors to submit proposals. ATSC proposed to use 17 subcontractors, all of which were small businesses. ATSC had executed teaming agreements with all 17 subcontractors, and these agreements ran to between 11 and 15 pages. However, ATSC only included the first page of each teaming agreement in its proposal.

The Army assigned ATSC a “Marginal” score for its Small Business Participation, even though all of ATSC’s subcontractors were small businesses. The Army determined that the first pages of ATSC’s teaming agreements were inadequate “to determine [the] amount of variety and complexity” of work assigned to small businesses. The Army was concerned that it could not ascertain “if small businesses are being utilized for skilled work or being relegated to menial tasks.”

After performing a best value trade off, the Army informed ATSC that it would not be included in the competitive range. ATSC then filed a protest with the Court. ATSC alleged, among other things, that the Army had erred by assigning ATSC a “Marginal” rating on the Small Business Participation factor.

The Court noted that, under the solicitation, teaming agreements were to “contain a statement of work that defines the work that will be performed by the subcontractor.” The Court continued:

ATSC did not comply with solicitation requirements regarding teaming agreements. Its incomplete teaming agreement did not show the amount of variety and complexity of work assigned to small business subcontractors as required by the solicitation. Notwithstanding the fact that reasonable minds might disagree on the sufficiency of ATSC’s compliance with the solicitation, under the applicable standard of review the court cannot say the Army acted unreasonably in assigning ATSC a significant weakness for its incomplete submission.

The Court denied ATSC’s motion for judgment and ruled in favor of the Army.

Neither the FAR nor the SBA’s regulations require written teaming agreements. In my experience, though, procuring agencies are increasingly asking offerors to submit written teaming agreements with their proposals. Teaming agreements help agencies confirm that proposed subcontractors really are committed to the project, and what work those subcontractors will perform.

In ATSC Aviation, the offeror only submitted portions of its teaming agreements, leaving the agency uncertain about what work the subcontractors would perform. And while most offerors might not make the same mistake, it’s possible that even a complete teaming agreement might not satisfy an agency interested in what work the subcontractors will perform.

In my experience, many teaming agreements are extremely vague when it comes to the statement of work–often offering little more than “TBD.” If an agency wants to determine what work a subcontractor will perform, “TBD” is unlikely to cut it.

So, for prime contractors, ATSC Aviation isn’t just about providing the whole teaming agreement, which should be obvious. It’s also a good reminder to make sure that the substance of the teaming agreement allows the agency to complete its evaluation.